b2cloud

20th July 2009

STOP PRESS: Banker admits Social Media is vital

Thoughts By 7 years ago

Now, please be gentle, I am new to all of this. I openly admit to an inordinate amount of technical ignorance (I just found out Web 2.0 is not something I need to download) but unlike a lot of my peers I plan to do something about it. The beauty of it all is that I am going to get you to help me. After all, isn’t that what Social Media is all about?

Let’s start at the beginning so you know a bit better where I am coming from. I am a banker, yes a dirty word these days and tough to admit to, believe me. Banking has enabled me to see a lot of the world, working here in Australia, London, Edinburgh, New York and Zurich. I’ve worked in Customer Service, Operations,Trading and I.T. Project Management for both Retail and Investment Banks. I am not the high flying exec on the company jet or a policy maker just one of the troops (the GFC was not my fault!) but I’d like to think that I am in a good position to understand banks from the inside.

Here in Melbourne I met a friend who told me about his interest in Social Media and he asked me how I thought it applied to Banking. My initial reaction was to laugh. Why would a bank waste its time? A Bank with a Facebook page? Would it post photos from the Senior Management conference in Thailand ?  He then explained to me, with more patience than I deserved, that Social Media (I’m typing SM from now on OK ?) is much more than Facebook and Twitter and invited me, no dared me, to find out about it for myself. So I did a bit of google-ing and what I found out scared the pin stripes off my suit.

First I tried the logical thing and found a definition in, ironically it turned out, Wikipedia. SM it seems, is all about people publishing content on-line, changing from being just readers of information to the creators of it as well. So it ranges from things like Facebook and Twitter to online help forums, discussion groups and of course Wikipedia.

Secondly I thought I’d take a look at the scope of SM and this is where it starts getting scary. SM is taking over the world. It is evolving like a super-virus, being changed and adapted by everyone it touches or touches it. It is practically unregulated, unplanned and effecting every part of global society and no one seems to know where it is going. It’s worse than sub prime debt!

Now I started to think about how SM could relate to banking and I thought of things such as customer complaint forums, mortgage comparison sites, investment discussions and even online banking. Of course a quick look shows that all this stuff exists and there is already much written in many good blogs, forums and research about the importance of SM to Banks, but from what I can find out ( and maybe I am looking in the wrong places, please feel free to point out my deficiencies here ) Banks don’t seem to be paying much attention to this huge change in Society. There seems to be no coordinated approach.

Why then do most banks seem to be ignoring the rapid rise of SM? Do they think it is just a fad? Do Banks think they are immune to these changes in society?  After all banks have basically been unchanged for hundreds of years and are essential to modern society aren’t they? I thought so until I read about Social Banking where people with money can lend to those without at better terms than banks due to lower overheads. Now it’s getting really scary.

Obviously there are issues with trust when it comes to banking and SM. Why should I believe anything as true? Legal issues abound, can I sue someone for bad blog advice? Do I know who is offering information and why?

It seems from blogs and research I have read that the place of Banks in society is changing. They seem to be moving more from the middle of society to the periphery. Retail bank branches are closing and we are moving towards a cashless society. Online banking is getting huge and the internet is effecting every part of our lives. Will banking be permanently changed by SM? I think it already has and the bank that accepts this and more importantly embraces this will be the successful bank of the future. It’s no longer the case of customers needing a bank to survive but the banks needing the customer.

Banks will need some form of control over or predictability of SM and the only way to get this is to understand it. For this banker though the most important lesson I have learnt is that I know nothing. Didn’t someone important once say that to acknowledge ignorance is the first step to enlightenment? Luckily though this is just a blog and I don’t have to reference or check my facts…..yet.

*** b2cloud would like to welcome Matthew Abbott to the team, and look forward to his perspective of Social Media from the eyes of a banker ***

  • Matthew,

    You asked why banks seem to be ignoring the rapid rise of SM.

    I suspect that they are not ignoring it. You’re from the sector and so of course should know better than I do, but if I extrapolate from conversations I have with other senior executives then I’d say the senior banking executives are in fact quite well aware of SM.

    The issue facing larger corporations comes to a point which you yourself raised – that social media can have an impact in a wide variety of areas across the bank. Therefore there needs to be a plan, there needs to be allocation of priorities and resources, there needs to be ROI and measurement, and in execution there needs to be training, cross-department coordination, escalation plans, etc etc.

    What these executives are looking for is not a Twitter campaign or a Facebook page pitched by a nice creative person from an Agency. They are looking for a sound business-driven assessment methodology, a strategy development process and an implementation and operational process along with real financial benefits and costs assessment and reporting. They need a holistic business approach to SM strategy and implementation.

    It is the lack of education for themselves and their teams, and lack of training for their staff in these processes which cause them not to act.

    And rightly so, because to act without doing it properly – so it works in a large complex organisation – is throwing money down the drain.

    The Social Media Academy provides all that training, and more. It’s from these corporates we get our demand, plus from consultants who wish to be trained in how to assist these larger corporations in SM.

    Walter Adamson @g2m
    Social Media Academy, Australia
    http://www.socialmedia-academy.com.au

  • A holistic approach to strategy development and operational business processes across a complex organisation that impacts IT, HR, Marketing, Ops, call centers etc etc would be a mammoth task. Sounds like CEO buy in is critical.

    If social media is the dialogue between people, is it the responsibility of the bank you work for (under the instruction of the CEO) to teach you how to use the tools? If they do teach you what the tools are and how to use them, does that prevent an individual from using them for ‘non work’ activities?

  • Josh,

    “…a mammoth task…” – yes, it is a big task and needs a business orientation and sound methodologies, exactly. You can’t align social media strategy with other organisational strategies without doing this work. It’s not rocket science it is business planning.

    “…sounds like CEO buy in is critical…” – it’s certainly nice to have but very often unlikely to happen in practice, because CEOs don’t like to endorse something which can sound so nebulous. You need an approach to getting things done in a large organisation and the CEO not to say “no”. It’s an important session of our Leadership Class.

    “… is it the responsibility of the bank you work for to teach you how to use the tools?” – yes, not only training but education, just like any other tool you use in the job. Education relates to the bigger role of social media, and purpose.

    ” …does that prevent an individual from using them for ‘non work’ activities?” – not sure I follow this question? Does being taught how to use Office at work prevent you from creating document and PPTs at home? Not in my world. But perhaps you are talking about the mixing of social and work activities and identities in the social media – this is a topic which needs to be covered in any program?

    You’re right to bring up that there are many issues, which also highlights the fact that “social media is not free” contrary to many statements made that it is free. Strategically, it takes quite an investment to get started, and a continuing investment of time and cost, and that’s why determining the best strategy is important.

    Cheers, Walter @g2m
    http://www.socialmedia-academy.com.au

  • matthew

    Walter – it is very encouraging to read your comments. I am pleased bankers at the executive level are at least starting to come to terms with SM and I hope you are selling them a lot of your courses. However talking and learning about it and using it to impact bottom line profit are not the same. No point in teaching someone to fish if they never plan to invest in bait.

    What I am looking forward to is to see which bank is going to be the first to emerge from talking and planning to doing. The banking world likes to talk about Generating Alpha – beating the benchmark or average. It’s using SM to achieve Alpha, and proving to bankers that this Alpha exists, that interests me.

    Yes it is a huge project with vast reach that needs planning (and who likes to plan more than bankers ?) but as far as I can see no bank in Australia is prepared to go past the planning stage yet.

  • Zoe Ann

    Good job Matt!

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